Ban’s visit a feather in the cap for govt

*Desparate quest to delay LG case in SC*PPPs endangered by case against Gota

September 3, 2016, 8:53 pm

The media briefing held on Friday at the end of UN Secretary General Ban Ki-moon’s visit to Sri Lanka was a damp squib which means it was good for Sri Lanka and especially for the government. Journalists who went to that media briefing expecting a sensational headline left disappointed. The only headline that we got was that the UN Sec. Gen. did his best to dodge making headlines. He uttered some platitudes for all of eight minutes and then fled after a further 12 minutes when the awkward questions started coming in. The government’s constant claim is that they ‘rescued’ Sri Lanka from a situation of encirclement by the Western powers and that the Rajapaksa government would never have been able to do what they have done. Well, to give due credit to the government, they have proved that that claim does have some substance to it on two occasions – the earlier visit of UN Human Rights Commissioner Zeid Al Hussein and now this visit by Ban Ki-moon.

Things have – mostly of their own accord - come a long way since the abject capitulation of last September when the government not only accepted the highly damaging report on Sri Lanka prepared by the Office of the High Commissioner on Human Rights (OHCHR) of the UN but also co-sponsored the even more damaging Western inspired UN Human Rights Council resolution against Sri Lanka. Last September when Zeid Al Hussein the UN Human Rights Commissioner presented the OHCHR report on Sri Lanka to the UNHRC sessions in Geneva, he was aggressive, judgmental and arrogant. But after his visit to Sri Lanka in February this year, he has taken a humble and flexible position. After visiting Sri Lanka, High Commissioner Hussein made a tail-between-the-legs speech and left. Now Ban Ki-moon himself has visited Sri Lanka, made an equally tail-between-the-legs speech and left. Quite obviously the higher powers that fund and maintain the UN system – their international paymasters – have prevailed upon these worthies the importance not saying or doing anything that would damage their investment in Sri Lanka.

One of the reasons why these senior UN officials have been treading very delicately is because they have been apprised of the fact that public opinion is going against the yahapalana government and that the opposition is gaining ground. The huge public events organized by the opposition would hardly go unnoticed by the foreign elements that backed the regime change that took place in January last year. Ironically it is this very vulnerability that has worked to the advantage of the government because they are able to prevail upon these foreign powers to back off without damaging their prospects further. If at the conclusion of his February visit to Sri Lanka Zeid had delivered the kind of speech he delivered to the UNHRC in September last year, that alone may have sealed the fate of this government. Ironically, the weakness and vulnerability of the yahapalana government has achieved what the strength of the Rajapaksa government was not able to achieve.

The stronger the Rajapaksa government was, the more aggressive and judgmental these foreign powers became. The weaker and more vulnerable the yahapalana government becomes, the more conciliatory and flexible the foreign powers become. The reason why Zeid Al Hussein in particular was so aggressive and gung ho last September could be because the new government had just won its second victory at the parliamentary elections against the Rajapaksa led opposition and they thought they could afford to be domineering and insistent. Since that time however things have changed and they probably see that the stability of the new government in Sri Lanka requires a less intrusive approach on the part of foreign powers.

Dilatory tactics to stall LG case

Last Tuesday when the Supreme Court took up the fundamental rights case filed by the Joint Opposition against the postponement of the local government elections, 11 individuals turned up with their lawyers to join the case as intervenient petitioners to plead their case for postponing the elections. After having considered the objections raised by the lawyers for the JO, the court refused to admit them as intervenient petitioners but allowed them to state their case. One of these would-be intervenient petitioners had stated his case at that hearing and the others are to be heard later this month. President’s Counsel Manohara de Silva had argued in courts that the president had gazetted the delimitation of the wards for the local authorities on 21 August 2015 and that the election can be held on the basis of that gazette. If there were delimitation issues in some local authority areas, elections can be held in the areas where there are no issues, leaving the rest for later.

Counsel had also pointed out that during the war, LG elections were held in areas outside LTTE control and that there was absolutely no justification for the postponement of elections to all local government institutions in this manner. The government is obviously fighting shy of holding an election at this point in time. The Joint Opposition which has a virtual monopoly of the opposition space is certain to field a separate list and that prospect seems to cause concern to the government. The fact that the Joint Opposition has not yet formed a separate political party is not an issue here because even the TNA does not contest under its own party or symbol at elections. The TNA uses the house symbol of the ITAK, one of the constituent parties of the TNA. The Joint Opposition can do the same and borrow a symbol from any one of the numerous parties within its fold in the event of an election.

It is not so much the UNP but the SLFP (Sirisena faction) that is worried about the consequences of holding the LG election. The UNP has less cause for worry because they have their block vote and will always get a certain number of representatives elected. The SLFP (Sirisena faction) however does not have a reliable block vote and they fear getting wiped out. If the SLFP group led by Sirisena gets wiped out at an election that will have serious repercussions on the UNP as well because the latter derives its power from the former – which is why the UNP is also not pushing for the local government elections. On Monday, a delegation of the Joint Opposition led by Dinesh Gunawardene met Prime Minister Ranil Wickremesinghe in parliament to ask him to hold the local government elections.

They had pointed out that the report of the Delimitation Commission was due at the end of August and that the elections can be called after that. The PM’s response to this had been that the budget will be presented to parliament in November and that it was not possible to call an election during this period. In the meantime, Provincial Councils and Local Government Minister Faizer Mustapha has further extended the deadline for concluding the delimitation review process till October 31 this year. What the government is afraid of is the change of mood in the country that takes place when an election is declared and people seek to settle scores for things not done and favours not granted, wishes not fulfilled and benefits not received.

It’s not just the SLFP (Sirisena faction) that is nervous about the erosion of its support base but the UNP as well. The unexpectedly poor turnout at the Matara rally held to mark the first anniversary of the national unity government would have added to the government’s worries. Last Monday, there was a blistering article in Lanka e News which is widely known to be a pro-UNP website, accusing the party of being insensitive to the needs of its rank and file members. The article was largely directed at UNP general secretary Kabir Hashim but the message in it applied to the whole party. It highlighted the fact that rank and file members of the UNP could not meet any minister. Adding to this Lanka e News stated that even they could not get through to the UNP general secretary and they wondered if the general secretary of a political party in a nation of 20 million was that busy, what life must be like for the general secretaries of national political parties in a country like India which has a population of over one billion.

The Lanka e News article highlighted the plight of party rank and file members who were being sent from pillar to post without any solutions being given to their problems. They stated that the office that had been opened at Siri Kotha to receive complaints of political victimization had been closed and that if they were to phone party headquarters wanting to know the progress on the applications for relief people had made, they would be told either that there were earlier applicants whose issues were being sorted out and that they would have to wait for their turn, or simply that this unit to look into complaints of political victimization was now closed. Obviously there is resentment building up among the lower ranks of the UNP at the treatment they have been getting.

Lanka e News has been constantly highlighting the grievances of the neglected rank and file members of the UNP and articles like this have been appearing on that website since last year, yet no improvement in the situation has taken place. It’s no wonder that the UNP is also not too keen on an election even though conventional wisdom would say that when the SLFP is divided the UNP stands to gain from it. The fear probably is that traditional party loyalties may have got displaced in this era of hybrid governments and blurred political boundaries.

Everything’s hunky dory

Last Sunday, when minister Eran Wickremeratne came on the ‘Mokada Vune’ on Derana TV he said in response to a question that the Volkswagen project in Sri Lanka had been put on hold because the company was facing problems internationally. The very next day, the Daily Mirror website carried an article to the effect that Wickremaratne had said that ‘the process of setting up a Volkswagen car plant in Kuliyapitiya, Kurunegala is moving ahead’ and that the BOI had handed over the concluded proposal to the project company. According to the Daily Mirror report, the minister is supposed to have even said that the next step would be to build the plant and start production. This was in complete contrast to what he himself had said on TV less than 24 hours earlier. It was clear to everybody that the first statement had been made voluntarily and that retraction that came immediately afterwards was due to some pressure exerted on him.

For some time now, it has been obvious to many people that given the situation that VW has had to face internationally and the fact that they already have a production facility in India, the much talked about VW factory in Kuliyapitiya is unlikely to see the light of day. But the UNP feels compelled to keep the bubble in the air. This Kuliyapitiya VW factory was one of their flagship projects which they dangled before the public at two elections and they probably think that their political prospects at future elections will be seriously hampered unless they kept hopes of this factory alive. This VW factory by itself is not going to solve the problems of the government even if it is set up some day. It’s just one factory and will provide only just so many jobs. But it’s a symbol of the promise that the UNP held out.

Despite Minister Eran Wickremeratne’s statement to the effect that the VW factory will not be set up anytime soon, Minister Akila Viraj Kariyawasam in whose electorate this factory was supposed to be set up was shown on TV talking about allocating land and doing the preliminary spadework to start constructing the factory. This VW factory has now assumed the proportions of the ‘oil from Pesalai’ hope that the Sirima Bandaranaike government held out in the 1970s. The government feels compelled to publicize sunshine stories from time to time probably because of the realization that nobody wants to be in a sinking ship and that if all that the people hear is doom and gloom, that becomes a self-fulfilling prophesy. But there are question over whether the government was taking their sunshine stories a little too far.

Some days ago, the government’s official website announced that tax income had increased by Rs.100 billion during the first half of this year. The government spokesman Gayantha Karunathilake had said this represented a 20% increase in tax income. The increase was ascribed to higher revenue collection by the Inland Revenue Department, Excise Department, and the Sri Lanka Customs. This claim was met with much scepticism. Who is going to believe that government revenue increased by 20% in just half a year without imposing any new taxes or increasing the existing tax rates? If tax revenue amounts to 10% of the GDP, a 20% increase of that amounts to 2% of the GDP. So the government is supposed to have increased tax revenue by 2% of the GDP in just six months. If it had increased by no less than Rs 100 billion in just half a year, that means tax revenue should increase by about another 100 billion before the year is out, so that will be an increase equivalent to 4% of the GDP in just one year without any new taxes or even the VAT increase!

The reality however is very different. To fulfil the shortage in revenue the government has been borrowing heavily in the domestic as well as international markets. Since coming into power, the government borrowed 2.3 billion USD from India, 3.65 billion USD through sovereign bond issues, 3.1 billion USD through Sri Lanka Development Bond issues and 1.5 billion USD from the IMF, bringing the total foreign borrowings to an incredible 10.5 billion USD in just eighteen months. Now the financial press reports that a further 700 million USD will be borrowed, bringing the total to 11.2 billion USD. Some of this such as two of the currency swaps taken from India and some of the short duration Sri Lanka Development Bonds may have already been repaid. But the government is taking on new debt much faster than it is retiring the debt already taken. The VAT increase which was supposed to increase government income and curb the need to borrow has not yet materialized.

The pressure from the trading community has so far prevented the government from bringing in new legislation to charge the increased VAT. In the meantime the budget is coming due in November. The government can ill-afford another fiasco like the last budget which was cut and chopped and changed beyond recognition and even after all that, most of its revenue proposals were never implemented. The upcoming budget may well determine the continued existence of this government. When caught in a situation of financial, political and administrative gridlock like this, any other government would have gone in for a general election to clear the decks and begin anew. But an election is just about the last thing on this government’s mind. Hence we find ourselves stumbling along into the next budget. In the meantime the Central Bank Governor was stressing the need for the VAT increase to be implemented without delay to meet the revenue needs of the government.

It is obviously the lack of sufficient revenue that lies at the root of the very public spat between the minister of Plantation Industries Navin Dissanayake and the Finance Minister Ravi Karunanayake with the latter wanting to tap the tea cess fund set up to promote the Sri Lankan tea industry globally. The dispute over several billion rupees accumulated in the tea promotion fund has now become wider with the Colombo Tea Traders’ Association, The Tea Exporters’ Association, Sri Lanka Tea Factory Owners’ Association, the Planters’ Association of Ceylon, the Federation of Tea Smallholders Societies and even the Colombo Brokers’ Association getting drawn into it on the side of Navin Dissanayake who has resolutely opposed the finance ministry’s move to take over the money. Navin obviously knows that once the money is taken, he’s not going to see it again, given the dire financial straits the government finds itself in. All stakeholders in the tea industry for their part hold that this money should be used only for the promotion of Sri Lanka tea in the global market and not for any other purpose.

Taking Gota to courts

Last week the Bribery Commission filed action in courts against Gotabhaya Rajapaksa and seven others including two former commanders of the navy over the partnership between the privately owned Avant Guard Maritime Services and the government owned Rakna Lanka Security Services. This is a case that is going to attract a lot of attention. It will be scrutinized by the press from day one onwards and the mere fact that such a case was filed at all will put a serious dampener on any public-private partnerships in the future. No one will be able to find a private company to enter into any partnership with a public corporation and no public servant will be willing to append his signature to any such agreement in the future. Parliamentarian Udaya Gammampila stated last week that this case had been filed despite two ministers in the government both senior lawyers - Tilak Marapone and Wijedasa Rajapakshe having said publicly that there were no grounds to file action.

The police have managed to arrest all individuals suspected to be involved in the Sakim Sulaiman murder. The mastermind is supposed to be one Mohamed Fazil and he is said to have recruited several Pettah ‘naatamis’ to carry out the abduction which later turned into a murder. Everyone is now waiting with bated breath to see whether the mastermind becomes a state witness and the naatamis go to the gallows as in the case of former DIG Vaas Gunawardene.